Tuesday, August 30, 2011

In late July I blogged about Apple's FRAND defense against some of Samsung's patents-in-suit. In that post I also explained the concept of FRAND and the role FRAND licensing plays in connection with industry standards.

The fact that FRAND commitments restrict the ways in which a patent holder can leverage standards-essential patents in disputes with competitors is also important to consider in the context of Google's proposed acquisition of Motorola Mobility (MMI). Most of MMI's patents aren't particularly strong. Yesterday, M-CAM founder and CEO Dr. David Martin simply called them "crap" on Bloomberg TV (shortly after 3:00 in this video). And the relatively best ones MMI has -- which wasn't discussed on Bloomberg -- are subject to FRAND commitments. Standards-essential patents can be great parking meters to collect limited amounts of money, but they just aren't nuclear warheads and won't protect Android.

The limitations of FRAND were raised again in a brief filed yesterday by Apple with the United States District Court for the Northern District of California in opposition to a Samsung motion to dismiss and strike Apple's FRAND-related counterclaims. In that pleading, Apple also makes reference to its FRAND-related claims against MMI.

Apple's lawyers use strong words for Samsung's behavior to which Apple's FRAND counterclaims relate. Not only do they want to stress that those counterclaims are highly relevant to the case but they also try to convince the court that Samsung's alleged misconduct is outrageous and against the public interest.

Here are some examples of the accusations Apple hurls at Samsung in this regard:

"Samsung has unlawfully acquired monopoly power in markets for the technologies purportedly covered by patents which Samsung claims are essential to industry standards ('declared essential patents') by deceiving standards-setting organizations ('SSOs')."

"Having obtained this ill-gotten monopoly power, Samsung has engaged in a relentless campaign of illegal and abusive assertions of its declared-essential patents to try to coerce Apple into tolerating Samsung's continuing imitation of [the iPhone and the iPad]."

"[The rules of a standard-setting organization] are designed to protect the telecommunications industry from the sort of anticompetitive ambush Samsung has perpetrated here."

While Apple's objectives are clear, I do agree that it's in the public interest to prevent any abuse of standards-essential patents and I support, in principle, every litigant who make reasonable (including reasonably aggressive) efforts to ensure that FRAND commitments are honored. That is my position regardless of the names of the companies involved.

For example, I also watched with some concern Nokia's assertion of standards-essential patents against Apple.

According to Apple's representations, Nokia sought to leverage FRAND-committed patents to force Apple into a cross-licensing agreement. However, the way Nokia used those standards patents in its dispute with Apple wasn't nearly as objectionable as what Samsung and Motorola Mobility are doing now:

Nokia made a clear distinction between FRAND-committed and unencumbered patents. Nokia referred to the latter group as "implementation patents" (as opposed to "standards patents") and used only such unencumbered patents at the ITC and in lawsuits in which Nokia requested unconditional injunctions. With respect to standards-related patents, Nokia asked the court to determine an appropriate level of FRAND compensation, and asked for a subsequent "permanent injunction preventing further infringement" only "until and unless Apple pays Nokia such FRAND compensation" for the past and in the future. By contrast, Samsung and Motorola try to shut Apple's products down on the basis of allegedly standards-essential patents, seeking injunctions and (in MMI's case) an ITC import ban regardless of whether Apple might be willing to pay FRAND royalties. Contrary to making a clear distinction as Nokia did, Samsung and Motorola simply lump standards-related and unencumbered patents together as if all patents were the same.

Apple never accused Nokia of deceiving standard-setting organizations. Basically, Apple and Nokia just had a commercial dispute over the demands that an owner of FRAND-committed patents is allowed to make, but Nokia was transparent at all stages.

Apple says Samsung sued before making a FRAND licensing offer. By contrast, there was no dispute between Apple and Nokia over the fact that Nokia made an offer (in fact, two alternative offers, though Apple didn't accept any of them).

Samsung's motion to dismiss and strike Apple's FRAND counterclaims argued that Apple is "unfairly maximiz[ing] the burden on Samsung" by raising those issues. Samsung calls them "non-patent counterclaims" and argues that Apple can just raise some of those arguments as defenses and doesn't have to ask the court for declaratory judgment.

Apple, however, stresses the need to obtain clarification from the court on Samsung's standards-related obligations. If Apple only raised FRAND-related defenses, there's a possibility that the court would never decide on those particular issues. The court may conclude that some other defenses (such as patent invalidty or non-infringement) has already succeeded, and in that event a court decision wouldn't necessarily go into detail on those standards-related issues.

Samsung argues that Apple has failed to state a sufficiently specific claim especially in connection with Apple's allegations that Samsung's behavior is a violation of antitrust laws. Apple's brief reinforces those accusations with different legal arguments and representations of fact, and also points out that Samsung itself has alleged that some other companies' purported failure to honor standards-related licensing obligations constituted unlawful anticompetitive conduct:

"Samsung's contention that Apple has failed to allege valid antitrust and related counterclaims is particularly remarkable given its own extensive history of asserting worldwide that similar standard-setting abuses violate antitrust and related laws. For example, Samsung argued to the Federal Trade Commission that another company’s (Rambus) failure 'to disclose its patent rights” and “other misleading conduct” led an SSO to standardize its technologies and convey monopoly power, and that Rambus should be barred from enforcing its patent rights as a result of its “antitrust violations.”1 In related private litigation, Samsung alleged that Rambus’s subversion of the standard-setting process violated the California Unfair Competition Law (UCL) because it 'violat[ed]' 'federal and state antitrust laws.' Similarly, in a complaint in the United Kingdom, Samsung alleged that Ericsson violated both Articles 81 and 82 of the EC Treaty – the EU analogues to Sections 1 and 2 of the Sherman Act – by failing to fulfill its promises to the European Telecommunications Standards Institute ('ETSI'), the standards body significantly responsible for the promulgation of the UMTS standard, to license on FRAND terms patents it claimed were essential to UMTS. Again, in a complaint against InterDigital, Samsung alleged that '[w]ithout certain rules,' SSOs 'would be illegal trusts,' and '[t]o prevent patent owners from imposing monopolistic royalties,” SSOs “condition the standardization of proprietary technology upon the patent owner’s promise to make the technology available to the public . . . on [FRAND] terms.'"

I quoted the above in detail because it shows how often those FRAND issues come up in such disputes. There are many more cases -- the passage quoted above only talks about some involving Samsung.

Among the legal arguments Apple makes to counter Samsung's motion, I believe one of them is particularly important. Samsung basically tried to portray all standard-setting activity as "procompetitive". It's true that antitrust regulators have repeatedly highlighted the contribution that industry standards can make to a healthy competitive environment. However, that doesn't mean that all standard-setting-related behavior is necessarily above board. Apple explains that a standard-setting process becomes anticompetitive even if there are many honest participants -- it takes only one patent holder to bring about anticompetitive effects. In Apple's view, a patent holder who made a false FRAND licensing promise commits monopoly abuse regardless of what all other contributors to the same standards do:

"What is relevant is that Samsung's misconduct rendered the concerted activity anticompetitive in fact."

In connection with its theory of anticompetitive misconduct, Apple also quotes this sentence from a recent court order in a federal lawsuit (Western District of Wisconsin, Apple v. Motorola Mobility, case no. 11-CV-178):

"By making false commitments that led to the establishment of worldwide standards incorporating its own patents and eliminating competing alternative technologies, Motorola [Mobility] has become a gatekeeper, accruing the power to harm or eliminate competition in the relevant markets if it so desires."

I have looked up that document, and after that quoted sentence, which is in the middle of a summary of Apple's factual allegations (even though that particular sentence isn't recognizable as a quote when taken out of context), the judge says:

It's important to consider the context. This was not a ruling that definitively found MMI to have committed an antitrust violation. The order merely denied a motion by MMI to dismiss Apple's case. Therefore, the angle from which the judge looked at the matter at this stage was limited to whether Apple had properly pleaded a competition case against MMI. The court could still arrive at a different conclusion later, especially if facts have to be established by a jury. So the quoted passages just say that Apple's accusations made sense per se. Still, the Wisconsin-based federal court's denial of MMI's motion to dismiss shows what kind of legal trouble companies can get into if they try to abuse their standards-essential patents in such patent disputes.

Apple brought a FRAND lawsuit against MMI because seven (!) of the 18 patents MMI is asserting against Apple in the United States were previously declared essential (by MMI itself) to industry standards (the '223, '697, '712, '230, '193, '559 and '898 patents). Even though this means that the ways in which MMI can use those patents are clearly restricted, there have been completely off-base claims by some people that the 18 patents MMI is asserting against Apple are so powerful that they can protect Android as a whole (including other OEMs, such as Samsung, HTC and LG) and are basically the reason for which Google offered $12.5 billion. Those who make such claims would be well-advised to take a look at the actual lawsuits and download some of the documents from the related court dockets. That might have an eye-opening effect on some people, but it takes a lot more time and analysis than just issuing statements that blow the strategic value of MMI's patents completely out of proportion. Googlorola won't help Samsung, as I explained before.

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Monday, August 29, 2011

[Update on 08/30/2011] A subsequent order (on the appointment of a damages expert by the court) provided further information on scheduling. There will be a separate, later trial to determine a damages award. That additional information is discussed in a new section at the end of this post. [/Update]

Judge William Alsup of the United States District Court for the Northern District of California, the judge presiding over Oracle v. Google, just issued an order suggesting the trial date, which is currently scheduled for October 31 (Halloween), may be postponed:

ORDER REGARDING JURY SELECTION

In the event the second large criminal trial does not begin as scheduled on October 17, then jury selection in the instant civil action shall occur on October 19 and the opening day of trial will remain October 31. In the event the second large criminal trial does go forward as scheduled, then jury selection and trial for this action will have to be postponed.

So there's a large criminal trial that's scheduled for October 17 in the same federal judicial district, and presumably Judge Alsup will be involved with it. Even though Judge Alsup's order starts with the scenario in which the Oracle v. Google trial date would remain unchanged, it seems to me that a postponement of this date is more likely than not to happen.

The order doesn't indicate by how long the trial would be postponed. Several months ago Judge Alsup argued that one of his clerks was now particularly knowledgeable about the technical issues related to this case but would leave the court later this year, and Judge Alsup wanted a trial to take place while that clerk is still available. If Judge Alsup wants a successor of that clerk to familiarize himself with this case, there could be a significant delay given the learning curve involved.

After siding with Oracle on the Lindholm email issue, this potential postponement could be meant to put some pressure on Oracle to adjust its demands in order to enable a settlement in the very near term. Probably neither the judge nor any of the parties really wants a trial -- but I believe that Oracle's and Google's positions are likely so far apart that this case may have to go to trial no matter how much everyone would rather avoid it. Oracle isn't in need of a short-term cash infusion. I can't imagine that the prospect of a delay will get Oracle to reduce its demands to the point where an agreement with Google is realistically achievable.

On August 30 (one day after the order that indicated a possible postponement of the trial), Judge Alsup announced the appointment of Brigham Young University professor of economics James R. Kearl as the independent damages expert. The order doesn't say which of the two parties proposed him, but whoever did so, he will be impartial (and will be paid by the court). Long before the court made this appointment, Google had failed to reduce the role of the independent expert to that of a mere adviser to the court as opposed to an expert who will present his findings to the jury.

The order concerning this so-called "FRE 706 expert" (FRE = Federal Rules of Evidence) says that Dr. Kearl requested "more time", and in order to accomodate that request, "the damages issues will not be tried on the current schedule". Instead of one trial that determines whether Google is liable at all and then (if Google is liable, which I guess itis to some degree, though the extent remains to be seen) determines a damages award, there will be two trials. Judge Alsup stresses that "[t]his bifurcation would not change the total amount of trial time available; the allotted time simply would be divided between the two trials". Since it's not clear whether the current schedule will be kept, Judge Alsup's order outlines two alternative scenarios:

If the large criminal trial mentioned in the first part of this post stays on schedule, the entire trial in the Oracle v. Google case "will be delayed considerably". The word "considerably" is somewhat vague, but the fact that Judge Alsup doesn't even indicate the length of such a delay, I guess (and it's really only a guess) the trial will then slip (at least) well into next year, or even beyond if Judge Alsup then decides to await the outcome of the reexaminations of Oracle's patents-in-suit by the US Patent & Trademark Office.

If that criminal trial is postponed, "then the liability portion of [Oracle v. Google] l will go forward on October 31 as scheduled, with all damages issues reserved for a second trial. The damages trial would trail by at least a month, beginning in early December at the earliest. [...] The same jury would hear both the liability trial and the damages trial."

So how likely is that criminal trial, which would delay Oracle v. Google "considerably", to stay on schedule? The last sentence of Judge Alsup's new order mentions "uncertainty":

"Due to the uncertainty regarding the criminal trial, Dr. Kearl's assignment should be planned such that it can be completed by early December in preparation for a possible damages trial at that time."

I'm sure this judge wouldn't ask the parties to prepare the independent damages expert for a trial date that's very unlikely. But he has previously made remarks that reflect the mere fact that those two litigants have vastly greater resources than the court, so he won't feel too bad about asking for this.

After all, what the judge wants more than anything else is for the parties to settle. By creating scheduling uncertainty, he may hope to increase the pressure. Google has to fear that this case may still go ahead on schedule, and with the aforementioned decision on the Lindholm email, the outcome could be catastrophic for Google. At the same time, Oracle doesn't know whether it may have to wait until next year or even beyond before the trial takes place.

If Oracle's and Google's positions weren't as far apart as I'm pretty sure they are, this uncertainty could serve as productive pressure that gets them to bridge their differences and agree on the terms of a settlement. But under the actual circumstances, I guess this uncertainty just means that the parties, their lawyers, the expert witnesses and all of us watching this case are simply held in suspense without an appreciably higher likelihood of a near-term settlement.

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In geographic terms, Australia and Germany are antipodal to each other, but they have something in common: those are the only two countries in the world in which Samsung cannot sell its Galaxy Tab 10.1 for the time being due to legal constraints.

Prior to today's hearing, Samsung had provided Apple with samples of the Australian version of the Galaxy Tab 10.1, which it planned to launch in a couple of weeks. iTnews reported that Apple's Australian lawyer said that "the new model has, at least compared with the US version, some reduced functionality that changes the landscape to a limited extent", but still said that at least two patents were infringed. One of the patents mentioned appears to be the Australian equivalent of the "touch event model" patent that Apple asserted in the Netherlands. Interestingly, the Dutch judge didn't believe that the related patent was infringed by Samsung's products (he issued an injunction but it was based on a different patent).

According to various reports, Samsung's Australian lawyer initially opposed the idea of another delay of the product launch, but the judge didn't believe it would be a good decision for Samsung to launch a product against which Apple is preparing a detailed motion for a preliminary injunction. Subsequently to some internal discussion among Samsung's executives and lawyers, the Korean company agreed to a further delay.

After Samsung made a similar concession four weeks ago, I already predicted the following:

We can all set our watches by Apple: the moment Samsung sends them those pre-release samples, Apple will immediately shoot for a preliminary injunction.

There you have it: this is exactly what Apple is doing now. The whole story of the Australian product being "different" enabled Samsung to delay a formal decision by a month, and today Samsung was apparently afraid of a formal court decision against it and therefore agreed to delay the product launch once again. At this point Samsung can claim that it entered into this agreement "voluntarily", although it's clear to an increasing number of people that Samsung is under serious pressure. But formally, an agreement is always voluntary, unlike a court ruling against someone's opposition.

From a purely Australian perspective, it would make sense for Samsung to take its chances and ask the court to rule. But Samsung is a global player and has to consider the possible implications of a negative decision in Australia for its wider dispute with Apple (19 lawsuits in 12 courts in 9 countries on 4 continents).

During today's hearing in Australia, Samsung's lawyer said that Apple was taking advantage of the Australian situation in other jurisdictions. Actually, to the extent that I have seen Apple's filings, I don't see any indication of Apple telling courts in other countries anything other than the truth, which is that Samsung agreed to a delay. It also seems that the Australian judge dismissed Samsung's related argument. But it's certainly true that whatever happens in one jurisdiction can potentially have a psychological effect on judges in other places.

In legal terms, the judge in California (where Apple is seeking a preliminary injunction against four Samsung products) will take her decision independently from whatever rulings are handed in Australia and the EU. Still, Apple's "copycat" story benefits from each and every bit of progress the company makes against Samsung.

While Apple's Australian business certainly benefits from not having to compete with the Galaxy Tab 10.1 for the time being, the one thing Apple primarily wants to do is pave the way for what could be a decisive victory in the United States in October. If Apple obtains a preliminary injunction in the U.S., or at some point appears fairly likely to succeed, Samsung will come under a lot of pressure to work out a settlement with Apple. But if Apple doesn't win in California, Samsung will likely accept the opportunity cost it incurs in Australia and parts of Europe and continue to pursue its longer-term strategy.

It won't be possible for Samsung to fend off all of Apple's attacks. Sooner or later, Apple will successfully assert intellectual property rights in pretty much every major jurisdiction with strong patent and design protection. But as long as Samsung can play for time and maybe get away with minor design changes or technical adjustments here and there, Samsung will keep on fighting.

According to the reports I read, Apple's and Samsung's lawyers disagreed at the hearing today on whether or not Samsung was able to work around some of Apple's asserted patents without a degradation of the quality of its products.

Apple's lawyer talked about "reduced functionality" while Samsung's lawyer claimed the Australian version was just "different" from the U.S. version.

I haven't seen the sample product Samsung provided to Apple, so I don't know. Sometimes it's possible to work around a patent without any adverse effect on product quality. But I've seen some pretty broad Apple patents that can't be worked around without either reducing functionality or degrading the user experience.

In my view, Apple will sooner or later enforce enough patents against Android-based products that there will be a noticeable degradation, even though the lawyers of Android device makers such as Samsung will always deny it.

Most financial analysts know too little about patents to understand what Google's acquisition of Motorola Mobility (MMI) is about -- it's not patents no matter how many people think or claim so. No one has presented any plausible reason why Apple and Microsoft decided last year to bring patent infringement claims against Motorola if those patents are so strong that they can protect the entire Android ecosystem. I believe Apple's and Microsoft's intellectual property experts know a whole lot more about patent litigation and licensing than all of the world's analysts combined. If they looked at Motorola's patents and decided to attack anyway, that says a lot. Besides many sellside analysts, there are also patent lawyers who are quoted in the media. None of them, however, works on any of the relevant cases.

But one of the craziest things I read in recent days was an analyst's opinion that things would get better for Samsung after Google closes its acquisition of MMI and then comes to the aide of Samsung. There's no reason to assume that the average strength of an MMI patent is substantially greater than the average strength of a Samsung patent for purposes of litigating against Apple. But Samsung owns far more patents than MMI. Samsung owns more patents just in the U.S. (roughly 28,000) than MMI's worldwide patents and patent applications combined (about 24,000).

Apart from the fact that Samsung would be in a better position to help MMI out than the other way round, Google wouldn't even want to do much for Samsung. Google's acquisition of MMI isn't going to benefit Samsung. In this context I'd like to recommend an excellent and balanced article written by The Register's Gavin Clarke on Android being a blessing and a curse for Linux. That article also talks about Google's claims of other device makers welcoming its acquisition of MMI and Samsung's plans to gain independence from Android.

In the meantime, of course, Samsung defends its Android-based products against Apple. At today's court hearing, Samsung announced that it would bring counterclaims accusing Apple of infringing some of Samsung's patents with the iPad. That's what Samsung has already done in other jurisdictions. The problem is that it probably won't get a fast-track decision on this because the current iPad generation has been available for a number of months.

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Sunday, August 28, 2011

These past few days I have received several more messages (on Twitter and via my contact form) reporting continued assertion-letter-mailing activity by Lodsys. After a quick update on that, I'll recommend an online boot camp for app developers targeted by patent trolls, and I'll also explain why I won't have the time to blog about Lodsys too frequently in the future.

I have received a copy of a letter dated August 23 sent by Lodsys to an Android game developer based in Germany.

Several months ago I already explained that Lodsys can bring assertions against persons and companies based outside the United States as long as those do business in the U.S., such as through Apple's app store or Google's Android Market. As a matter of fact, Lodsys has already sued overseas companies: Wulven Games of Vietnam (dropped from the action, presumably due to a settlement), Illusion Lab of Sweden, and Rovio of Finland.

Two weeks ago Google pulled a PR stunt by announcing reexamination requests against two Lodsys patents. After giving that story exclusively to one publication, Google then provided its reexamination requests -- long before they entered the public record -- to an unreliable blog that's known for its pro-Google bias especially in connection with the Oracle lawsuit. That blog celebrated Google's reexamination requests as a game changer.

Apparently, and not surprisingly, the problem hasn't gone away at all. Instead, it seems that Lodsys now sends even more letters to Android developers than in the weeks before.

The problem is that such a reexamination request doesn't help app developers who receive (or have already received) a Lodsys letter and have to decide whether to pay or whether to take their chances. I have for a long time been advocating a more cautious approach, favoring settlements on reasonable terms over costly and drawn-out litigation. Google's reexamination requests aren't a basis for app developers to ignore Lodsys's letters. Lodsys can send letters regardless of those requests. Lodsys can sue developers regardless of those requests. Maybe they'll have some effect further down the road, but there's no guarantee they'll ever have any useful effect. I talked to a reexamination expert and he couldn't find anything impressive in Google's reexamination requests.

What app developers need is coverage and guidance. Without coverage, it's incredibly risky to fight a well-funded troll. Without guidance, most of them don't even know what to do.

Google's general counsel Kent Walker told Wired on the occasion of those reexamination requests:

"Developers play a critical part in the Android ecosystem and Google will continue to support them."

Support? What does Mr. Walker call "support"? I dont know of even one app developer who received a substantive answer from Google when asking them about how to deal with a Lodsys letter. I don't know of anyone who received coverage from Google so he can pick a fight with Lodsys.

Maybe Google's initiative will have some useful effect at some point in the distant future. But an increasing number of app developers have a problem right here and now. Mr. Walker, what do you do to support them when they really need you?

After iOS and Android developers, Lodsys is now also going after BlackBerry app devs. Since RIM faces a lot of challenges, I don't know how much help those developers can expect from their platform maker. But since neither Apple's motion for an intervention in a Lodsys lawsuit nor Google's reexamination requests have provided any timely solution, RIM can hardly do anything less useful than those two companies...

I have already referred many "lodsysed" app developers to the Electronic Frontier Foundation, a non-profit organization that truly cares about these kinds of issues. The EFF has now scheduled a virtual boot camp for September 9, 2011, at 12 noon Pacific Time (that's 8 PM London time, 9 PM Central European Time). On this page you can find further information on how to participate.

There will be a panel of law professors and patent attorneys who can explain to the app developer community what it means to be threatened with U.S. patent litigation, and how patent licensing works.

I think it's great that the EFF organizes this event and I encourage all app developers to participate.

When you follow those presentations, always think about this in terms of what's best for you under the circumstances. One "lodsysed" developer told me he generates about $70 per month with his game. He figured that if he acceded to Lodsys's royalty demand, the total cost would be in the tens of dollars. The cost of advice from a patent attorney is in the hundreds of dollars per hour, and even an initial analysis of this issue takes many hours, not just one. That's why for most developers there really isn't any reasonable alternative to blanket coverage from their platform makers (Apple, Google, RIM).

I previously said on Twitter and Google+ that I'll generally do a lot less reporting on non-practicing entity (NPE) issues (such as Lodsys) in the future since there's so much going on now between large operating companies.

This blog has become much more popular than I ever thought it would, and that's also because the topics I cover are of interest to a rapidly-growing audience. Recently, traffic almost doubled on a monthly basis, for three months in a row. It's obvious that traffic can't continue to grow exponentially -- nor can my number of Twitter followers triple every three months (as it just did). The importance of patents to the mobile devices industry became very apparent to many people due to some major events: Apple's settlement with Nokia, the Nortel patent auction, the ITC's initial determination finding HTC to infringe two Apple patents, etc.

I still have to update several of my battlemaps that visualize major disputes. There are also some other topics related to those major disputes and transactions that I want to cover. So I have to make some choices, including tough choices.

I'm originally a programmer, and that's why I personally cared very much about the Lodsys type of issue. I saw a need to counter various attempts by some people to mislead the app dev community. I told people the truth, which is that for 99% or more of all app devs it's simply not a responsible choice to waste time, money and energy on high-risk legal fights with trolls.

This blog is my personal blog. Only I decide which topics I write about, and which positions to take. Blogging about Lodsys was a personal priority. But with all that's going on now, I have to face the fact that I'm in the consulting business and none of my clients ever asked me questions about Lodsys, while I get many questions about the long-term impact of intellectual property issues on the market shares of large players, on the state of affairs in the lawsuits involving large players, on Google's proposed acquisition of Motorola Mobility, and on possible acquisitions of patent holding companies such as InterDigital.

As long as it was possible to cover those "big company" issues and additionally report on Lodsys, I tried to do both. At this point there's too much work to do, and as much as I regret it, I won't be able to focus on Lodsys.

I may still report on it every once in a while if something extremely important happens and when I find the time, but I won't follow the various Lodsys lawsuits and assertion letters in detail.

At this point I think it's very likely that Apple's motion for an intervention will be granted, but it's not a solution in and of itself. I think it's somewhat likely that Google's reexamination requests will result in "first Office actions" by the USPTO regarding those patents, and the USPTO may very well reject those patents on a preliminary basis, but a final rejection will probably take years and is not guaranteed to happen. It seems that Lodsys continues to pressure app developers into license agreements. I believe at some point Lodsys will announce such license deals either on its website or in a court filing. Unfortunately, there's also a significant risk that we may at some point -- probably within a matter of months -- see another Lodsys lawsuit against a long list of app developers who refused to pay. This sad story will continue, and I'm sure there will be media reports on major developments. Again, it's still possible that I will write about it every once in a while, but not nearly as much as during those past few months, for the reasons I explained. Thank you for your understanding.

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Friday, August 26, 2011

For the third time this month (following orders issued on August 1 and August 4), the U.S. District Court for the Northern District of California yesterday took a decision against Google's repeated attempts to withhold a damning email -- the so-called Lindholm email -- from the evidence record in the infringement lawsuit brought by Oracle.

Actually, the court issued two related orders on the same day. The first one of these orders granted Oracle's motion to compel Google to reproduce (in terms of "put back") various versions (mostly auto-saved drafts) of the Lindholm email. That decision was taken during a hearing that took place in the San Francisco-based court late Thursday morning by local time:

Today the court held a hearing on the parties' joint discovery letter of August 5, 2011 [...], which concerned Plaintiff's motion to compel Defendant to (re)produce certain documents, which the court will collectively refer to as the Lindholm Emails. During the hearing the court granted Plaintiff's motion, and a separate order detailing the court's reasoning will be forthcoming.

After hearing the court's ruling, Defendant indicated its intent to appeal the decision to Judge Alsup. Defendant also appeared to believe that it need not produce the Lindholm Emails until Judge Alsup rules on the appeal. Defendant is mistaken. The filing of objections does not stay the operation of the court's order. [citations of other cases]

Thus, the court hereby ORDERS that Defendant produce the Lindholm Emails to Plaintiff immediately; and it further ORDERS that the parties immediately arrange for the deposition of Mr. Lindholm.

I have also uploaded that order to Scribd. [Update] When I originally wrote this post, the detailed version of the order with the legal reasoning wasn't available yet. Later I uploaded that one to Scribd as well. Magistrate Judge Ryu discusses several criteria for her decision, any one of which would be sufficient on its own to admit the Lindholm email as evidence. The detailed reasoning also highlights that Google's own lead counsel at a July 21 hearing made representations (later retracted) that support the court's position. [/Update]

The order was issued by Magistrate Judge Donna Ryu, who handles discovery disputes in this litigation. The judge presiding over this litigation is Judge William Alsup, and the order stresses that Google's declared intent to appeal this discovery decision to Judge Alsup (which I don't think is likely to change anything anyway) doesn't allow Google to stall the process. Google now has to put the Lindholm email (in its various versions) back into the evidence record, and the deposition of Mr. Lindholm will occur shortly.

The fact that Google's lawyers want to appeal this discovery matter to Judge Alsup is not surprising. They have been trying rather desperately now for about a month to have the Lindholm email -- and references to that email in a hearing transcript -- removed from the evidence record. They probably know that the odds are long against Judge Alsup overruling Magistrate Judge Ryu on this one. Judge Alsup himself has previously shown absolutely no understanding for Google's attempts to suppress this particular piece of evidence. But Google's lawyers may already be thinking of a possible appeal to the Court of Appeals for the Federal Circuit (CAFC) after losing the trial. In that case they would have to raise questions of law in order to be able to ask for a new trial. They might make the admissibility of the Lindholm email as evidence a cornerstone of a (post-trial) appeal to the CAFC, and if that's what they want to do, they have to exhaust all of their procedural options in the district court, no matter how likely or, in this case, unlikely that is going to lead to anything other than further annoying Judge Alsup.

I said that the court issued two near-simultaneous orders. I still owe you the other one:

ORDER DENYING DEFENDANT'S MOTION TO REDACT AND SEAL PORTIONS OF HEARING TRANSCRIPT

In accordance with this court's granting of Plaintiff's motion to compel [...], the court DENIES Defendant's motion to redact and seal portions of the hearing transcript.

The above order is a logical consequence of the previous one: if the Lindholm email forms part of the evidence record, Google can't demand that references to it be redacted out of a July 21 hearing transcript.

Google will keep fighting, but realistically, the jury will get to see the Lindholm email. As a result, there's a fairly high risk for Google that it could be found to have infringed Oracle's Java-related intellectual property rights willfully, which in turn would result in triple damages and, even more importantly, an injunction -- the maximum leverage Oracle could possibly get in order to dictate the terms of a license deal.

Of course, one can never rule out that the jury might be less impressed by the Lindholm email than Judge Alsup predicted it would be. But the effort Google's lawyers make to get rid of that piece of evidence -- and the bridges they appear to be willing to burn with the two judges assigned to this case -- show that Google is, indeed, very afraid.

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After a Dutch court ordered a preliminary injunction against three Samsung smartphones (which is far from devastating to Samsung but adds another piece to Apple's "copycat" story) and a German court upheld -- at least until September 9, 2011, but probably beyond -- a preliminary injunction against the Galaxy Tab 10.1, Apple won an important scheduling victory in the Northern District of California.

I believe Apple never realistically expected that the court would agree to a February trial date, especially after Judge Lucy Koh rejected in mid-July a proposal by Apple to shorten the time for the briefing process leading to the decision now finally taken. After that decision on a meta-schedule (a schedule for the process of setting a schedule) I was rather skeptical of the judge's willingness to grant an expedited schedule, but I said that the court would proceed "reasonably swiftly" as it does in Oracle v. Google, too. In fact, the current schedule in Oracle v. Google envisions a trial starting on Halloween, 14.5 months after Oracle's complaint, and Judge Koh's expedited trial date for Apple v. Samsung is 15.5 months after Apple's original complaint. In terms of the number of claims, the Oracle case is actually the simpler one, and the judge presiding over that one is a highly efficient case manager. Considering the greater complexity of Apple v. Samsung, this is really a pretty ambitious schedule and, therefore, a major win for Apple.

After Samsung had argued that there were 43 different claims at stake in this litigation, Apple argued that Samsung had "artificially inflated the scope of this case by interposing 12 more utility patents", and Apple's lawyers told the court that Samsung's counterclaims don't appear to be particularly urgent, suggesting that Apple's claims and Samsung's claims could be severed, with Apple's claims going to trial on an expedited schedule and Samsung's claims remaining on a normal schedule. The judge rejected that proposal. In those patent cases it's always important for a party to have the chance of a favorable decision on its own claims at the same time as the other party. Separating the two sets of claims would have disadvantaged Samsung, and while I believe the court wouldn't want to treat any party that way, it would look particularly awkward if a court granted its "local hero" an expedited trial and denied the same to the foreign litigant.

This federal case is only one of 19 lawsuits going on between the parties in 12 courts in 9 countries on 4 continents. With the expedited trial in California, it's still possible that maybe one or a couple of the other jurisdictions will take final decisions (leaving preliminary injunctions aside) before Apple's original federal lawsuit gets decided, but Apple has at least ensured that there won't be too much of a delay between possible decisions in other countries and the one to be taken in its home court.

Compared to scheduling, the question of which lawyers are allowed to work for Apple on this case is much less important. After all, there's no shortage of qualified intellectual property lawyers who are happy to represent Apple in general and in such a high-profile case in particular. But apparently there was a decent probability of the court agreeing with Samsung's motion to disqualify the firm of Bridges & Mavrakakis due to certain work some of its lawyers previously performed for Samsung on somewhat related issues. While Apple opposed that motion, all of the lawyers from that firm representing Apple in this litigation notified the court yesterday of their withdrawal from this action. In a separate letter filed yesterday by a law firm that advised Bridges & Mavrakakis on this particular professional conduct issue, reference is made to "the Court's decisions at the Case Management Conference". So there are strong indications that Samsung was going to win this one, and the lawyers concerned withdrew in order to prevent a likely -- if not impending -- disqualification order.

I'm sure Samsung is happy about not having to fight against its own former lawyers. That said, this case is still the same case as before, and the withdrawal of those lawyers is far less important than the substance of the case (and also less important than the schedule, which now favors Apple's interests).

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Thursday, August 25, 2011

Shortly before 4 PM local time, the Düsseldorf Regional Court's hearing on Apple v. Samsung (Galaxy Tab 10.1 Community design infringement case) ended, and I reported on it during and right after the hearing. I have now obtained a copy of the court's official press release, issued within about an hour of the closing of the court session, and this is my English translation (note that it's my translation, not an official one approved by the court):

Post-injunction hearing in Community design litigation between Apple and Samsung

Chamber 14c of the Düsseldorf Regional Court held a hearing today on Samsung's [post-injunction] opposition to the preliminary injunction ordered at Apple's request on August 9, 2011. The session started with an introduction of the state of affairs in this litigation by the presiding judge and her statement on the preliminary legal opinion of the Court. According to that position, the Community design presented by Apple has to be considered valid and is infringed by Samsung. That said, the Court reaffirmed doubts about having cross-border jurisdiction over a company domiciled outside the European Union with respect to Europe-wide injunctions. Therefore, the Court has indicated that, after the consultation that took place before the hearing, it tends to uphold the preliminary injunction against Samsung Germany to its full extent and to lift it with respect to Samsung's Korean parent company with respect to markets outside of the Federal Republic of Germany. At the same time, the Court also pointed out that the final decision can be different from this inclination if one must conclude that there was no sense of urgency for a preliminary injunction, considering that Apple could have moved for a preliminary injunction at an earlier point in time. This could, for example, be the case if it had already been possible in early June 2011 -- as Samsung represented to the Court -- to gather from Samsung's German subsidiary's German-language website based on reliable and easily accessible depictions what Samsung's product intended for sale in the European market would look like and when it was going to be released.

Subsequently to the aforementioned statement by the Court, the parties had ample opportunity to present their views. Thereafter, the Court scheduled the announcement of a [post-hearing] decision for

in order to weigh the mutual arguments of the parties against each other and to give additional consideration to the Court's preliminary legal opinion in recognition of those arguments.

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I changed plans a few days ago and didn't travel to today's court hearing in Düsseldorf on the Apple v. Samsung Galaxy Tab 10.1 Community design inringement case. After the suspension of the enforcement of the injunction with respect to Samsung's (Korean parent company's) activities outside of Germany, I thought it was unlikely that the court would uphold the ruling with respect to its ex-Germany part.

Webwereld.nl's Andreas Udo de Haes reported via Twitter from the courtroom that the hearing just ended (shortly before 4 PM local time). The injunction will remain in force and effect for the time being. A post-hearing ruling will be issued on September 9.

The suspension regarding other markets than Germany also doesn't change, for now.

First reports already surfaced after the judge's introductory statement -- but prior to any statement by the parties' counsel -- that the court upholds the preliminary injunction (with respect to Germany). That, however, is an oversimplification of where things stood at the time. The judge only indicated that she wasn't swayed by Samsung's pleading to lift the injunction. Samsung had submitted a brief before today's court session. However, after that statement by the judge, counsel for the parties still had the opportunity to make presentations, and a post-hearing decision is scheduled for September 9.

According to Bloomberg, the judge said that "[t]here are a lot of alternative ways to design a tablet device, as the market amply shows", and added that the Düsseldorf court thinks "Apple's EU design rights grant a medium range of protection, if not a broad one." Based on what I've heard so far about the hearing, it looks like a long shot for Samsung to turn that judge around.

It also seems that the court isn't impressed by claims of Apple having misled the court with the photos it presented in its complaint. At some point she told both parties' lawyers to discuss that kind of matter outside but the court doesn't seem interested in it. If the judge really had been interested in a face-saving exit strategy, she might have claimed that she felt she was misled. But that judge appears to be firmly on Apple's side and considers the Galaxy Tab 10.1 an iPad rip-off.

Samsung's lawyers passed around German translations of yesterday's Dutch court ruling. On a preliminary basis, the Dutch ruling didn't recognize Apple's asserted Community design as valid. While courts in one EU member state are required to take into consideration a decision taken in another EU member state with respect to the same EU law (in this case, the Community Design Regulation), this isn't comparable to the binding effect of case law on courts in, for example, one circuit (group of federal districts) in the United States. Basically, the judge in Düsseldorf only needs to somehow mention the Dutch ruling in her decision but is free to disagree, such as by saying that she didn't find any new arguments in the Dutch ruling that persuaded her to change mind.

I'd like to explain another difference between U.S. and German law that's important for the further development of this case. There are two questions of fact here that could be outcome-determinative in different ways, but it's key to consider that there's no such thing as US-style discovery in German civil procedure. These are the two questions of fact, their potential implications, and the related burden of proof:

For the question of whether a German can bar Samsung's Korean parent company from selling in other EU member states, the judge said that this would depend on the nature of the relationship between Samsung's Korean parent company and the German operation. Those are complicated questions of control and governance. Since there's no discovery in Germany, I doubt that Apple will be able to disprove Samsung's counsel's claim that the German entity is legally independent. So I believe it's unlikely that the injunction will again be put in force for markets outside of Germany.

The judge said that the preliminary injunction was granted based on Apple's representations concerning a sense of urgency. I explained in a recent post that German courts grant preliminary injunctions (as opposed to final ones at the end of a full-blown main proceeding) only in urgent cases, which means that the period between when a right holder becomes aware of an infringement and when he files a motion for a preliminary injunction must not be too long -- generally, German lawyers are cautious about moving for preliminary injunctions if more than a month has passed since the acquisition of "positive knowledge". The judge indicated that Apple's motion would be considered untimely (which would do away with the preliminary injunction) if Samsung could prove that Apple knew of the first pictures of the German Galaxy Tab 10.1 that showed up somewhere in early June. But again, there's no discovery and this means Samsung would have the burden of proof. No Apple executive is realistically going to concede "positive knowledge" in early June.

While things aren't looking good for Samsung, it's not completely impossible that the judge may lift the injunction in the September 9 decision. It's not too likely to happen, however.

Assuming the Düsseldorf regional court affirms the decision as indicated today, there are different ways in which Samsung can appeal:

On the one hand, regardless of whether the preliminary injunction remains in force, there will be a full-blown main proceeding now in the Düsseldorf regional court. That one will probably take about a year. Samsung could also appeal that one, possibly all the way to the German Federal Court of Justice, and questions relevant under EU law could be referred to the Court of Justice of the European Union. But all of that takes too long for the Galaxy Tab 10.1.

In addition, and still on the fast track, Samsung can try to appeal to the Oberlandesgericht (Higher Regional Court), also in Düsseldorf. That one is also part of the Düsseldorf school of thought but sometimes reserves the lower court's decisions. However, if that one affirms the preliminary injunction, it's game over on the fast track.

Very interestingly, Neelie Kroes, vice president of the European Commission and commissioner for the EU's Digital Agenda (previously in charge of competition and known particularly for the fines she imposed on Microsoft and Intel and an in-depth review of Oracle's acquisition of Sun Microsystems), just said on Twitter that Brussels is following the Apple v. Samsung cases in the Netherlands and Germany closely:

It's important not to overrate such a tweet. The courts are independent, and Mrs. Kroes is no longer in charge of antitrust enforcement. She now has a policymaking focus, and since the intellectual property right asserted in this particular part of the Apple v. Samsung dispute is an EU instrument, I interpret that tweet as an interest in the proceedings from a longer-term policymaking point of view more than anything else, at least for the time being.

[Update] Asked by an open source journalist about the nature of her interest in this, she replied: "I follow any developments related to the Digital Agenda" [/Update]

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Wednesday, August 24, 2011

I previously reported on a preliminary injunction granted by a Dutch court today against the Samsung Galaxy S, Galaxy S II and Ace smartphones. In its official reaction, Samsung underscored that most of Apple's infringement allegations failed at this stage. Let me add -- just to be precise here -- that after the preliminary injunction there will still be a full-blown main proceeding in that case, and even if the judge wasn't convinced of certain patents being valid and infringed ahead of today's decision, it's still possible that Apple successfully enforces those patents in the main proceeding, just like it's also possible for Samsung to defeat the photo gallery patent in the main proceeding.

Even if preliminary, the detailed decision handed today contains some interesting information, some of which is also relevant to some other lawsuits, such as Apple's disputes with Motorola and HTC. In the United States, Apple asserts its slide-to-unlock patent (U.S. Patent No. 7,657,849) against those companies. Apple is suing HTC over it in Delaware, and Motorola in Southern Florida. The Dutch judge who wrote today's decision declared the European counterpart of that patent (EP20080903) obvious (as compared to prior art presented by Samsung) and, therefore, invalid. An invalid patent cannot be infringed, which is why the Dutch decision doesn't even address the infringement question.

I have meanwhile taken a closer look at the judge's reasoning, and while I may have a patent-critical perspective and, as a result, may be particularly likely to consider patents obvious, I believe that Samsung's defense against the slide-to-unlock patent could very well also convince U.S. juries.

The swipe-to-unlock gesture patent application was filed on December 23, 2005. But earlier that year, Neonode, a small and little-known Swedish manufacturer of mobile phones, released its Neonode N1m phone running Windows CE. That phone already had a slide-to-unlock feature as you can see in the following pictures (which Samsung provided to the Dutch court):

The Dutch judge concluded that the Neonode N1m already implemented the entirety of Apple's claimed invention with only one difference remaining: Apple's slide-to-unlock patent also claims an unlock image that moves along with the finger as the sliding gesture is performed. But that difference didn't convince the judge that Apple was entitled to a patent. He said that the use of an unlock image was "obvious" (in Dutch he said it was "lying on the hand" in terms of "not far to seek").

To underscore the obviousness of the idea of an image moving along with the sliding finger, the decision refers to two examples of user interfaces that described the basic idea that is also behind Apple's unlock image:

Samsung presented an article from a 1992 (!) edition of a publication on human factors in computer design, entitled "Touchscreen Toggle Design". I also found references to it on the web, such as this one.

Samsung furthermore pointed to Guitar Rig, a software effect processor originally released in mid-2004, and presented this screenshot:

Note that this isn't just about conventional sliders, which have been around for much longer than Guitar Rig for such purposes as setting the volume of a loudspeaker or mixing colors. What's important here is that those sliders have to be moved along a pre-defined path to a particular position in order to have the effect of an on/off switch (as in the slide-to-unlock case).

Looking at what was already there before Apple's December 2005 patent application, the judge concluded that what Apple's patent claims is "not inventive", in other words, too trivial to be worthy of patent protection.

Apple has already asserted dozens of patents against Android device makers and may assert many more going forward. I don't see Google's proposed acquisition of Motorola Mobility as a solution for Android's IP problems. Those disputes will go on for quite some more time. It's a you-win-some-you-lose-some business. The slide-to-unlock patent appears to be coming out on the losing end, at least in the Netherlands, and for good reasons in my opinion.

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The Rechtbank 's-Gravenhage (a Dutch court in the city of The Hague) today issued a formally Europe-wide preliminary injunction against Samsung's Galaxy S, Galaxy S II and Ace smartphones -- but not the Galaxy tablets -- at Apple's request. The decision follows a hearing held on August 10 and 11, 2011.

Let me clarify "formally Europe-wide" here:

This relates to countries in which one particular European software patent (EP 2059868) is valid. (Formally it's a "device" patent, but it doesn't represent any innovation on the hardware side, so the nature of the invention is that of a software patent the way I define that term.) The injunction relates to the current version of those devices but would not cover future releases that may be designed in ways that don't infringe this particular patent.

The status of that patent varies between different countries as this list shows. While the patent was originally designated to more than 30 member countries of the European Patent Organization (which is not an EU organization and also includes non-EU members such as Switzerland), there are many countries in which the application wasn't turned into a valid patent because Apple didn't make the necessary administrative effort and pick up the related costs. Those countries in which Apple didn't successfully pursue and complete a local registration include Austria, Belgium, Czech Republic, Estonia, Greece, Iceland, Italy, Latvia, Lithuania, Portugal, Romania, Slovenia, Slovakia, and Spain. Local registrations have apparently succeeded in Germany, Ireland, Sweden, Switzerland, and the UK -- as well as the Netherlands, obviously.

In legal terms, the order does not bind Samsung's Korean parent company -- only three different Samsung subsidiaries registered in the Netherlands -- with respect to other countries than the Netherlands. However, it is my understanding that Samsung's European logistics use the Netherlands as the primary hub. If Samsung's Korean parent company wants to exercise its freedom to ship into other European countries despite this injunction, it will have to reorganize its logistics chain in Europe accordingly.

The decision will take effect in seven weeks, i.e., mid October. That is consistent with what the judge said at the hearing, and that date didn't change even though the decision was handed ahead of time. The court apparently has the expectation that Samsung should be able to modify its software in the meantime in order to steer clear of infringement.

This is the patent to which the decision relates (Apple also brought other claims but didn't succeed with those):

Apple would now have a much more impactful decision in its hands if it had pursued the European registration of that patent more thoroughly. Also, Samsung may be able to work around that particular patent without a huge degradation of the usability of its devices because it appears to relate to the way users flip through the pictures in a photo gallery. However, regardless of how Samsung may be able to work around this decision in Europe, it's a setback for Android, a platform that is at issue in more than 50 lawsuits worldwide. In all likelihood, the winning patent is infringed by Android itself -- not the operating system per se, but by one or more of the applications that ship with Android and without which the usefulness of Android would be impaired in one particular area (photo viewing). Apple has now obtained the first enforceable court decision (out of many lawsuits going on around the world) that finds Android to infringe an Apple patent -- and there will definitely be many more to come.

At a first look it seems that the court has a skeptical perspective on the other two software patents asserted by Apple.

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Tuesday, August 23, 2011

Late last night, Samsung filed its opposition brief to Apple's motion for a preliminary injunction in the United States. The main part of Samsung's opposition brief has not yet entered the public record because they filed it under seal. I hope to see a redacted version later today. Samsung has also filed extensive declarations with numerous exhibits, and those documents already give an idea of what Samsung's defense strategy against Apple's motion is.

One element of Samsung's defense strategy is interesting enough that I wanted to report on it beforehand. Ever since Apple started to assert the design of the iPad against other manufacturers, many people have been wondering whether there's actually prior art for the general design of the iPad in some futuristic devices shown in sci-fi movies and TV series. And indeed, Samsung's lawyers make this claim now in their defense against Apple's motion for a preliminary injunction.

The following image shows the content of page 2 of an exhibit filed by Samsung with the U.S. District Court for the Northern District of California (click to enlarge):

This is how the related declaration explains why this movie picture is valid prior art for a certain iPad-related design patent:

Attached hereto as Exhibit D is a true and correct copy of a still image taken from Stanley Kubrick's 1968 film "2001: A Space Odyssey." In a clip from that film lasting about one minute, two astronauts are eating and at the same time using personal tablet computers. The clip can be downloaded online at http://www.youtube.com/watch?v=JQ8pQVDyaLo. As with the design claimed by the D’889 Patent, the tablet disclosed in the clip has an overall rectangular shape with a dominant display screen, narrow borders, a predominately flat front surface, a flat back surface (which is evident because the tablets are lying flat on the table's surface), and a thin form factor.

I also watched that movie years ago. I wouldn't call myself a fan, but I think it's a good film. Admittedly, I had forgotten about those tablet computers shown in it.

It would be amazing if the court agreed with Samsung that this constitutes prior art for that particular iPad-related design patent. Whether or not Samsung will succeed, the mere fact that they proffer this kind of evidence is remarkable and will be exciting for many fans of movies in general -- and of that movie in particular -- to find out about.

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Sunday, August 21, 2011

Oracle's patent and copyright infringement lawsuit against Google is currently -- apart from some remaining discovery issues such as network effects -- mostly about summary judgment: decisions on aspects of the case that the judge may or may not take on his own before trial because the law is clear irrespectively of whether the opposing party's factual representations are right or wrong.

The only topic on which a summary judgment process was scheduled a while ago -- and is already underway -- is copyright infringement. Google wants that one thrown out; Oracle wants it to be put before the jury. On everything else, the moving party needs to ask the judge for permission to file a motion in the first place. If the judge allows a particular summary judgment motion, September 8 is the filing deadline. Google proposed four summary judgment motions.

Before I discuss Oracle's opposition to Google's motion to dismiss all copyright infringement allegations and the important issues it raises, I'll give a quick update on what happened to Google's proposals for additional summary judgment motions.

The two potentially most impactful ones of Google's proposals were thrown out because the judge doesn't believe that such motions were likely to succeed. Google can still try to raise those issues at trial, but those are long shots.

The boldest one was the claim that free-of-charge software should be allowed to infringe patents contributorily. Many software patents can only be infringed contributorily, not directly, so if Google was right, this would have wide-ranging consequences. Google may request summary judgment on the issue of contributory infringement by foreign device makers, but that was only the smaller part of the related proposal. However, Judge Alsup doesn't let Google request summary judgment on the free-of-charge idea. Oracle made it clear that Google does have a business model for Android anyway.

Another proposal was related to patent marking. It would have had potential impact only on past damages. The judge didn't want to spend time on this at this stage because the number of patent claims to be actually asserted at trial will be much lower than the current shortlist of 41, so the judge would rather evaluate patent marking based on a smaller number of claims. At that point it will be too late for summary judgment, but Google can raise the same arguments at trial. The judge didn't take a position on how likely those arguments are to succeed.

Besides copyright and the aforementioned issue of infringement by foreign device makers, the only other aspect of the case on which Google is allowed to request summary judgment is assignor estoppel, a theory based on which Oracle wants to preclude Google from challenging the validity of four patents some of whose inventors now work for Google. Oracle told the judge that this matter could be resolved "by stipulation or otherwise", and the judge would be fine with such a resolution, "but in the meantime, [Google] may file its motion". If that motion succeeds, Google can contest the validity of those patents, but this has nothing to do with the substantive merits of those invalidity grounds. In my previous report on this proposal I already supported the idea of Google being allowed to challenge those patents, not based on any analysis of the legal situation but just because I believe any substantive argument that helps to invalidate a patent should be allowed.

Application programming interfaces (APIs) are incredibly important not only in a technical but also a legal and commercial sense. Control over them can make all the difference between allowed interactions with a given program and illegal forms of use.

APIs are equally important for software running on the same machine, client-server software, and cloud computing. Case in point, Oracle's copyrightability argument also refers to some of Google's APIs, particularly the AdSense API, as examples of APIs for which protection is claimed.

Google's summary judgment motion asks the court to throw out Oracle's copyright infringement allegations because they relate to APIs, which Google wants the court to find unprotectable by copyright, and to smaller amounts of files that Google claims fall under a "de minimis" provision (too small to matter).

The "de minimis" argument for those particular files (on some of which I reported back in January) would also affect other software because Google basically wants to have the right to copy small parts of large programs, and to integrate copied material into much larger programs (Oracle cites a court ruling: "No plagiarist can excuse the wrong by showing how much of his work he did not pirate."). Oracle argues that the significance of such copying must be looked at on a file-by-file basis. Moreover, Oracle rejects the assertion that certain files generated by Google through decompilation are merely "dummy files" for testing. Oracle argues that those weren't in the "test" area of Oracle's directory structure for Java, and even if they might have served mere testing purposes for Android, that doesn't mean they weren't valuable.

Back to the bigger issue -- copyrightability of APIs. There are fundamental misconceptions out there. Again and again I hear people claim that APIs are not copyrightable in the United States. This is what Google also claims here. But Oracle disagrees very strongly, and quite convincingly. This is one of Oracle's headlines:

Oracle also claims that there's no case law to support Google's position:

No court has ever found that the APIs for a complex software platform like Java are ineligible for copyright protection.

If Oracle is right, Android faces problems beyond Java. As I explained in March, Google also denies the copyrightability of approximately 700 Linux header files. Most members of the Linux community -- and many reporters -- thought that Linus Torvalds put this particular issue to rest even though Torvalds does not make the law and issued a more-heat-than-light kind of statement that admitted he had not "looked at exactly what Google does with the kernel headers" (in other words, he wasn't able to really guarantee to people that everything was above board). Others believe that the so-called COPYING file shipped with Linux indirectly allows Google's way to use those Linux kernel headers. That, again, is an untested assumption. That file may or may not be found by a court to modify the GPL whenever such a case is brought. Even if it is deemed a binding part of an agreement, it was added after several years of Linux development, so any contributions made in the early years would not be affected.

During that debate over the Linux GPL issue Android may face (by now, there's another, even easier-to-understand one that the FSF itself acknowledges), all sorts of people spoke out and dismissed those allegations -- in a similar way as Torvalds, without accepting responsibility for their claims (they all pointed out they didn't know the details) and, especially, without really addressing IP litigator Edward Naughton's "macro" and "micro" arguments for API copyrightability. Oracle's copyrightability argument raises very similar "macro" and "micro" arguments now with respect to Java.

Even if those who claimed that Linux represents a special case were right (which in my view they probably aren't to the extent they believe), Google has done the same kind of "GPL laundering" to header files that are not part of the standard Linux kernel headers. Such a wholesale denial of the copyrightability of APIs is at least very risky. It's not a responsible choice for software that a whole ecosystem depends upon. It can trigger the so-called copyleft effect, meaning that derivative works have to be published under the GPL, too -- a no-go for many commercial purposes. In its pleading, Oracle states that Google "created a derivative work by deliberately copying [many Java] API specifications into the Android source code". Accordingly, one can claim that Google created a derivative work of Linux by copying many Linux API files into the Android source code...

But it's not just that the copyrightability of APIs has implications for Android beyond its use of Java. For example, it could also play a role at some point with non-GPL extensions of Oracle's MySQL open source database.

Oracle recalls that "Google's motion does not dispute copyright ownership or that copying took place". So this is all about whether this kind of copying was allowed. Google's primary argument for why it is allowed is non-copyrightability. That's also the primary focus of this post. But let's also quickly go over Oracle's response to other excuses presented by Google:

Google claims it conferred a "public benefit" because it took the copyrighted works and incorporated them into the “open source Android platform." [...] This self-serving argument is untenable. If a party can freely ignore the copyright and fragment the platform, as Google has, compatibility in the marketplace will be severely undermined. Allowing copying that creates an incompatible end product is against the public interest.

Google's success has come at Oracle's expense. Oracle's Chief Corporate Architect, Edward Screven, testified that "Android has basically foreclosed" Oracle's strategy for succeeding in the Smartphone market and that Java is "pretty well locked out of the smartphone market because of Android."

In an excerpt of a transcript presented by Oracle, the same Oracle executive also said:

But one of the ways, of course, that we make money in Java is by licensing it to other parties. So we'd be very happy, very happy, to sell a license to Google. But Google doesn't want to pay.

One of the first defenses raised by Google was that it used some code from the Apache Harmony project. Oracle says:

But it does not matter in any event. A defendant is liable when he copies, with or without a license, from a third party who copied from the plaintiff.

That's also what I said when that defense came up for the first time.

Scènes à faire: Google argues that the API material it copied simply had to be copied because there was no alternative choice. Oracle says:

But Google’s scenes a faire argument is backwards. The proper test under scenes a faire or merger is whether Oracle was constrained in its choice of design because of the need to be compatible with some other product or standard, not Google.

In this context, Oracle explains what the Mitel v. Iqtel case really meant: it was about the right holder's constraints, not those of the copyist. I have also had discussions with people who misunderstood Mitel.

Fair use: Oracle's brief also addresses widespread misbelief about the meaning of certain other copyrightability decisions in the United States. I have also had discussions with people who didn't understand that decisions that allowed developers under fair use rules to make copies of software for development purposes or to write interoperable software still didn't allow the wholesale copying and publication of such material. Here's a passage in which Oracle explains this, too:

Google’s copying cannot be excused as fair use. [...] Google's fair use argument relies heavily on the Ninth Circuit’s decisions in Sony and Sega -- two cases with very different facts that raise very different policy concerns. The focus of the court's inquiry in both cases was whether it was fair use to reverse engineer a copyrighted product where "disassembly is the only way to gain access to the ideas and functional elements embodied in a copyrighted [work]." [...] But here, Oracle’s APIs were in plain view for anyone to see, so there was no need to copy them to discover their functional elements.

Another key to both decisions was that they concern intermediate copying only. The final product was not alleged to infringe the copyright. [...] As the Ninth Circuit noted in Sega, "[o]ur conclusion does not, of course, insulate [defendant] from a claim of copyright infringement with respect to its finished products." [...] Here, of course, Oracles accuses the final Android APIs and code of infringement.

Oracle's brief contains passages that expose Google as hypocritical and reckless, but without saying so directly.

Oracle notes that "Google, in fact, claims copyright protection for its own APIs" and points to various Google APIs terms of use, including those for the AdSense API. I'm not sure that copyright is necessarily the kind of intellectual property right Google claims, but it's true that Google imposes restrictions, and if it ever wants to enforce them, it needs to rely on some legal theory.

In its summary judgment motion, Google quoted Eric Schmidt, who testified in Congress on interface copyrightability back in 1994. Oracle now points out that Google sought protection of some of its own APIs while Schmidt was Google's CEO:

Google understands the creativity and importance of APIs. It asserts copyright and other intellectual property rights over its own APIs. [...] These rights were applied for and maintained during the tenure of long time Google CEO and current Chairman Eric Schmidt. Google quotes extensively from Mr. Schmidt's 1994 testimony advocating against copyrightability, identifying him only as the "Sun CTO." [...] As this shows, there is a distinction between what a person advocates the law should be and what it is.

Oracle also stresses that instead of fragmenting Java, Google could have developed a fully compatible implementation of Java:

Google could have taken the standard license [for fully compatible implementations], or it could have negotiated to obtain a special license. It did neither."

The strongest hypocrisy point is made with respect to Google's heavy-handed control over Android:

Notably, Google requires its OEMs to maintain the full set of Android APIs – including the 37 APIs it copied from Oracle ─ to prevent fragmentation of the Android platform. Android's license is similar to Java’s providing, among other things, that “[d]evice implementations MUST NOT omit any managed APIs," "MUST NOT modify the publicly exposed APIs on the Android platform," and "MUST NOT add any publicly exposed elements…to the APIs." [...] Google itself, of course, has done all of these things to the Java APIs.

It certainly seems that Google is a "do as I say, not as I do" kind of company especially when it comes to intellectual property and openness. However, this just serves to undermine Google's credibility in the eyes of the judge. It does not per se prove that APIs are copyrightable. Oracle presents other arguments for that.

What a lot of deniers of API copyrightability don't take into consideration is that those aren't merely utilitarian and dictated by technical requirements. They are designed by humans for use by other humans. That is also why someone trying to convince a court of something not being copyrightable has a high hurdle to meet. The proponent of copyrightability can basically say: "all of this program code was written by human beings -- show me why it's not expressive".

Oracle explains the human design of such APIs and distinguishes the needs of humans (who write programs using such APIs) from those of the computer executing the actual code:

[citing a declaration in support of Oracle's brief]

"[A] fundamental purpose of the APIs is not just to call a function, but to "impose a level of abstraction and structure on top of the underlying software development program" to help programmers understand its complexities. [...] The computer does not care about this organizational structure. But humans need some form of order to handle complex programming tasks and work efficiently.

In a related context, Oracle says:

Copyright Law Protects the Original Expression in the Selection, Coordination and Arrangement Of the Java APIs.

Copyright law protects expression in software design, including the selection and structure of software elements. Google's motion glosses over this issue, but selecting what to include in an API, and designing the appropriate structure to contain it, takes a great deal of creativity and skill.

Oracle asserts that (at least a significant number of) the names chosen for its API elements are copyrightable:

Copyright Law Protects the Names of the Packages, Classes, Interfaces, Fields, and Other Elements in the Java APIs

Basically, Oracle explains that Android's developers took a shortcut by not thinking about alternative names themselves. If Google argues that it needed to stay compatible with Java, Oracle can obviously point to the fact that Android is incompatible with Java anyway:

Though Google copied 37 Java APIs from Java's core libraries, there were many other APIs it did not implement. Despite its claim that its copying was required for compatibility, the reality is Google took only the parts it wanted and created many other, incompatible APIs for Android. As a result, many programs written in Java for other platforms will not run on Android, and many programs written for Android will not run on Java platforms and devices.

Oracle also holds against Google the fact that the copied API material is extensive (Google's de minimis argument was made only in connection with a dozen source files):

Google does not deny that it deliberately copied 37 APIs from Java's core libraries. The APIs are extensive. They include thousands of elements. When fully printed out, they extend to more than 10,000 pages. [...] When Google finished its copying, it proclaimed on the Android developer website: "Android includes a set of core libraries that provides most of the functionality available in the core libraries of the Java programming language."

[...]

Google’s copying of the names of 37 packages, 458 classes, 158 Interfaces, 2,427 methods, 893 fields, and other elements [...] did not come about due to the existence of limited language.

[...]

Claiming there is no originality in the selection of almost 8000 names borders on absurd.

Applying the kind of microscopic focus Google does here would "result in almost nothing being copyrightable because original works broken down into their composite parts would usually be little more than basic unprotectable elements like letters, colors and symbols."

[...]

The choice of what to include in the APIs and how to arrange them requires creativity and skill. The 37 APIs contain thousands of different elements, arranged in a unique structure, with many interdependent relationships. They readily meet the standard for copyright protection.

[...]

They are not just a list of names and methods, but an
extraordinarily complex structure of hierarchy and interdepen[den]cy [corrected a rare typo in Oracle's brief].

[...]

"[A] claim of copyright infringement can be based on infringement of a combination of unprotected elements."

[...]

In fact, Google copied the entire hierarchical and organizational structure of the APIs into the Android source code.

[...]

Google has cited no decision holding that the structure of a computer program with this level of complexity and interdepen[den]cy [same typo, corrected again] is precluded from copyright protection. Decisions have, however, recognized the copyrightability of programs with much simpler structures.

Obviously the copyrightability of APIs is controversial. I don't mean to say that Oracle will easily win this. But Oracle has presented strong reasons for which the judge should not dismiss Oracle's copyright infringement assertions at this stage.

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Florian Mueller used to be an award-winning intellectual property activist. His 30 years of software industry expertise span different market segments (games, education, productivity and infrastructure software), diverse business models, and technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof, except that he is long AAPL.) He is now developing games for smartphones and tablet computers.